* New proposal with revised terms proposed for aircraft
* Airline says lessors expected to have at least 60%
* Calls steep haircut in earlier plan a misinterpretation
KUALA LUMPUR, Feb 21 (Reuters) - Malaysian long-haul budget
airline AirAsia X Bhd (AAX) has proposed a separate
restructuring program for its aircraft lessors that aims to
tackle their concerns, citing a chance to recover rental losses,
a document seen by Reuters shows.
The airline, an affiliate of AirAsia Group, has
been trying for months to reconstitute 64.15 billion ringgit
($15.9 billion) of debt into 200 million ringgit of debt. More
than a dozen creditors, mostly lessors, had intervened in court
to challenge a proposal that would have meant a haircut for them
The new proposal for lessors is a key step as the airline
looks to win creditors' approval for its restructuring.
The proposal seeks to address lessors' concerns about their
forward commercial agreements and the viability of the airline's
business after recapitalisation, according to the document,
which comprises slides describing the plan.
Under the revised proposal, AAX said lessors are expected to
recover at least 60% of what they are owed.
A person familiar with the matter said the airline deemed
the earlier description of the debt haircut inaccurate as they
"excluded returns from ongoing leases," referring to recovery of
rental losses and outstanding debt.
AAX urged lessors to agree to a "pre-packaged lock-up" deal
to expedite the restructuring process.
The person, who declined to be named because of the
sensitivity of the matter, said the airline wanted to lock in
terms of the deal with lessors before convening a creditors
meeting to vote on the restructuring.
"(It) balances the needs of creditors and new investors
without compromising the financial viability of the business
plan," AAX said in the slides.
AAX did not immediately respond to a request seeking
confirmation of the proposal.
Lessors ICBC Leasing, Kayan Aviation, Aviator Capital,
Castlelake, Aircastle and Minsheng Financial Leasing did
not immediately respond to Reuters' requests for comment.
Macquarie AirFinance, BOC Aviation Ltd and AerCap
declined to comment.
The revised restructuring plan comes as the Kuala Lumpur
High Court on Friday allowed AAX to convene creditor meetings
and vote on its restructuring plan, the Edge Financial Daily
The Edge also reported that the court has separated the
airline's creditors into three categories: airport operator
Malaysia Airports Holdings Bhd, planemaker Airbus SE
and other creditors. The aircraft lessors, for whom AAX
has proposed the new plan, will fall in the last category.
The split could give lessors a bigger say in the talks, as
Airbus otherwise accounts for most of the debt AAX wants to
The court has also ordered AAX to convene separate meetings
with its different groups of creditors within six months.
"Lessors have no choice but to go through (with this plan)
if they want to recoup their money, however paltry it is," said
Shukor Yusof, head of aviation consultancy Endau Analytics,
adding that AAX's business model needs to be fundamentally
BOC Aviation had last year asked the court to dismiss AAX's
restructuring proposal as it ruled out a debt-to-equity swap and
gave too much power to Airbus as a creditor. It also said AAX
was "hopelessly insolvent."
The airline announced in December plans to raise 500 million
ringgit through a rights issue to existing shareholders and a
share subscription for new investors after its debt
($1 = 4.0380 ringgit)
(Reporting by Liz Lee; Editing by Gerry Doyle and Jacqueline